Changes to the Pay Limit Scheme in Denmark
Changes to the Pay Limit Scheme in Denmark
It does not come as a surprise that Denmark is one of the most desired countries for immigration. It is voted to be the 3rd happiest country in the world with high wages, flexible working hours, a supportive work environment and excellent work-life balance.
While citizens from the EU, EEA and Switzerland are entitled to live and work in Denmark, non-EU/EEA/Switzerland nationals are required to obtain residence and work permits before they enter the country. There are various schemes under which third-country citizens can gain permits. One of the most popular is the Pay Limit Scheme.
What is the Pay Limit Scheme?
If you have been offered a job in Denmark with a high salary, you can apply for a residence and work permit via the Pay Limit Scheme. It is not required that you have a specific educational background or that your job is within a specific professional field. The only criteria are that your wage is equal to or above a certain amount.
As of 1 January 2019, the pay limit has become DKK 426,985.06 (€57,228.30) per year or DKK 35,582.08 (€4769.02) per month. This change applies only to the new applications filed after 1 January 2019. When an employee is to apply for a prolongation of his permit, he may continue on the pay limit which applied at the time of the first application. Nonetheless, the employee must be employed in the same position and on the same terms.
How does the Pay Limit Scheme work?
The earnings equal to the Pay Limit Scheme’s minimum amount can only consist of your basic salary, labour market pension scheme and holiday allowances paid out of the employee. Such benefits as housing and living expenses, transportation, paid phone and internet cannot be included in the minimum amount stated under the Pay Limit Scheme. Should your employer wish to include the above benefits, the amount of earnings must be increased.
Does my salary need to be paid into a Danish bank account?
The Salary up to and including the Pay Limit scheme’s minimum amount must be paid to a Danish bank account in a bank operating legally in Denmark. However, the extra amount on top of the Pay Limit Scheme can be paid to any other bank account.
Are you planning to work abroad in Denmark? Get in touch now to learn everything you need to know about local immigration rules, law and tax compliance.